DEFERRED PROSECUTION AGREEMENTS

A Deferred Prosecution Agreement (DPA) is an agreement between a designated prosecutor (probably the SFO) and a company whom the prosecutor is considering prosecuting for an offence that is specified in Part 2 of the Crime and Courts Act 2013 at section 45 and Schedule 17.

Before the terms of a DPA can be agreed, the prosecutor must apply to the Crown Court for a declaration that the agreement is likely to be in the interests of justice and the terms are fair, reasonable and proportionate.

This is not just a box ticking process, as the court has to give reasons for its decision – whatever the decision may be. An adverse decision by the judge does not end the prospect of a DPA, as a further application can be submitted later. It might be helpful to note that the Judiciary had an important part to play in the whole process surrounding DPAs in the UK. The judges have the last say. We are yet to see whether the judges will want to encourage prosecutors to take a harder line within DPA’s, whether the judges will refuse DPAs on the basis that a course of conduct was too bad to avoid criminal proceedings or whether judges will want to make sure that prosecutors are not over-ambitious with the terms because they have an interest in the amount recovered.

Note that all of these proceedings are in private.

Having obtained court approval for entering into a DPA, and then having agreed the terms of the DPA, the prosecutor must apply again to the Crown Court for a declaration that the DPA is in the interests of justice and is fair, reasonable and proportionate. Once approved by the Crown Court then the DPA comes into force. Reasons will have been given by the court for its approval or otherwise. Any approval of a DPA, and the reasons for the approval, should be given in open court. Thereafter the prosecutor must publish all these details.

If a Prosecutor believes that the terms of a DPA have not been complied with then application should be made to the Crown Court. The court then has to make a decision whether there has been a failure to comply. This decision is taken on the balance of probabilities. If the court finds there has been non-compliance then either the parties could be invited to agree proposals to remedy the failure, or the DPA may be terminated. Reasons must be given.

It is possible that the prosecutor, albeit believing that the DPA has not been complied with, may decide not to make application to the Crown Court. If the prosecutor makes that decision then the prosecutor must publish the decision together with the reasons for believing that there is non-compliance, and the reasons for not making the application to the court.

Simply because a DPA has been entered into does not mean that it cannot be varied. There are circumstances that mean the parties may agree variations. This could be necessary either because the court has invited it, or because there were some unforeseen factors at the time the DPA was agreed. Any agreement needs to go back to the court for approval.

Once the period of the DPA has expired the prosecutor should discontinue the proceedings in the Crown Court. At this time the person who was subject to the DPA is protected from any other action for the same offence unless it is shown that the person provided inaccurate, misleading or incomplete information to the prosecutor, and the person knew or ought to have known the information was inaccurate, misleading or incomplete.

The content of a DPA are set down in statute. The contents must include:

• A statement of facts relating to the alleged offence which may include admissions that have been made;
• An expiry date;
• the date on which the DPA ceases to have effect if not previously terminated because of breach;
• Impose on the person at least the following requirements, namely:
  • To pay to the prosecutor a financial penalty;
  • To compensate victims of the alleged offence;
  • To donate money to a charity or other third party;
  • To disgorge any profits made from the alleged offence;
  • To implement a compliance program or make changes to an existing compliance program relating to the person’s policies or to the training of employees, or both;
  • To cooperate in any investigation related to the alleged offence;
  • To pay any reasonable costs of the prosecutor in relation to the alleged offence or the DPA;
  • The DPA may also contain time limits within which the requirements must be complied with.

Advice given includes that the amount of any financial penalty that is agreed between the parties should broadly be comparable to any fine that a court would have imposed on conviction for the alleged offence following a guilty plea.

It is also possible for the DPA to include a term that sets out the consequences of any failure to comply with any of the terms.

The DPP and the Director of the SFO were jointly charged with issueing a code for prosecutors giving guidance on the approach to investigating and prosecuting DPAs.

It should be noted that any money received by a prosecutor under the terms of a DPA are paid to the Consolidated Fund. A share of the money is expected to go to the SFO not only to cover the cost of these proceedings but to benefit the SFO’s budget.

The Act sets out what has to be contained within a DPA. You will see that there is wide scope for discussion in respect of the terms.

Very early expert legal advice is essential.

Contact Dennis Clarke to discuss your needs and agree a fee structure to help to resolve this. At the same time why not have a policy to deal with other eventualities that are usually ignored but which will be expensive if no plan is in place. See our business sectionfor more.